Patent Attorney Gottfried Schüll Talks Via LA HEVC Patent Pool vs. Microsoft Infringement Suit
Three licensors of the Via LA HEVC Patent Pool (M&K Holdings, Gensquare, and Tagivan II) have filed a patent infringement suit against Microsoft in the Landgericht Duesseldorf court in Germany, alleging unlicensed use of High Efficiency Video Coding (HEVC) technology in several Microsoft products. In this interview with Streaming Learning Center's Jan Ozer, patent attorney Gottfried Schull, who is representing Via LA HEVC, discusses what's at issue in the lawsuit.
Here’s our conversation with Gottfried Schüll.
Patent Owners and Via LA's Role
Jan Ozer: So which patent owners are you representing and why doesn't Via LA bring this suit directly?
Gottfried Schüll: We do not disclose the patent owners who bring the suit traditionally (author’s note: VIA LA provided the identify of the patent owners in this case). But the reason why Via LA is not suing, it's basically a strategic decision of Via LA. The patents are still owned by the owners, and Via LA has the right to sublicense according to the license agreement. And so the decision is that the patent owners file and litigation cases.
Microsoft Products Involved
Jan Ozer: Okay, which Microsoft products are involved in this lawsuit?
Gottfried Schüll: There quite a lot of Microsoft products involved. First of all, it's Windows 11, which is coming with an HEVC-compliant decoder. Xbox as well as the Surface tablets. A little bit different is the usage in the Windows 10 operating system, where you have to download a decoder and you have to pay for it. These are the products. The payment, by the way, for the download would easily cover the license fees.
Damages Sought and German Legal System
Jan Ozer: What are you suing for? What can you tell me about the damages that you're hoping for or suing for in the lawsuit?
Gottfried Schüll: That's something very different in Germany from cases in the United States. We don't sue for damages. We are going for the injunction claim. So, our goal is to obtain a cease and desist order by the court, which would stop the defendant from bringing the product on the market. And that's the key advantage of the German venue because that's taken very seriously. So, if the court order is not obeyed by the defendant, we have all kinds of punitive measures to make the defendant getting compliant with the court order. That's the silver bullet under German patent litigation.
Why Sue in Germany?
Jan Ozer: Okay. Is that why the VIA-LA members are suing in Germany as opposed to the United States?
Gottfried Schüll: Yes, I guess so. Perhaps it's worth in that context to mention that we have a long tradition in suing for the license also of the programs managed by MPEG LA and Via LA for more than 20 years now, nearly 25 years. We had about 500 patent cases in about 35 campaigns. We are the hotspot for patent litigation here in Germany for these programs. My understanding is that the injunction claim is a very powerful claim in case you want to have a starting point for discussions.
Potential Outcomes for Microsoft
Jan Ozer: Facing such an injunction, what would Microsoft have to do to avoid it? Would they license in Germany? Would they license worldwide?
Gottfried Schüll: Typically, defendants raise the defense that they only want to take a license for Germany, or for the EU when you talk about the UPC, so the new European court. But it's accepted in Germany that it's not sufficient. So, the pool can insist on only settling the case based on a worldwide license.
History of Negotiations
Jan Ozer: What can you tell us about the facts of the case? How long was the LA seeking a license from Microsoft? Do you have any history you can share?
Gottfried Schüll: Some basic history: The program has started in 2015, as you mentioned already, and the communication started in that year. So, it's communication now for 10 years.
Reasons for Microsoft's Delay
Jan Ozer: What's been the holdup? Why hasn't Microsoft taken a license so far?
Gottfried Schüll: I guess that's a question you should better ask Microsoft. Of course, we don't know, at least I don't know. And I cannot tell you.
German Courts and Patent Pools
Jan Ozer: So looking at German courts and their treatment of patent pools, what's the sense of the value of patent pools in German courts?
Gottfried Schüll: You imagine if you have about 30 licensees and 500 licensees, if you would have interaction and court interactions between them. That would be absolutely inefficient and that's absolutely accepted by the court. And that has been a discussion already in the first case we filed in 2000. So that has been very clear from the beginning that the court is very fine with the idea of a patent pool also in line with the guidelines of the European Commission.
Reciprocity in Other Courts
Jan Ozer: And if the plaintiffs win in Germany, how much reciprocity is there in other courts in the EU and in the United States?
Gottfried Schüll: By reciprocity you mean acceptance of other courts, of the decisions of the German courts and vice versa. So that's very difficult to judge. Always think about it like that. Our judges look at decisions from other countries. We expect that other judges in other countries do the same, but they make up their own mind. So there's no clear binding. Having said that, at least in Europe, I can say that the decisions of the German courts in patent litigation are very respected all over Europe. But there's no binding effect of that.
FRAND Defense
Jan Ozer: I know there's been a trend in some patent litigation cases that when you have a very unwilling licensee, they can lose the FRAND defense and the plaintiff can charge a reasonable fee that's not FRAND restricted. Is that something that you see in Germany?
Gottfried Schüll: Yes, I believe what you're referring to is happening in other licensing programs. The licensing programs of MPEG LA and Via LA are somehow the gold standard of FRAND licensing. So that has been the first licensing program where patent litigations have happened in Germany. And these things you're referring to do not happen in these cases, in our cases. It's perhaps a different situation. I can explain it like that.
Historical Damages
Jan Ozer: MPEG-LA started approaching Microsoft in 2015. It's now 2025. How many years back can you go when you seek a judgment like this?
Gottfried Schüll: There's no limitation. The only point is that the patent has to be still in force. You know patents expire in 20 years after filing. And for the injunction claim, there's no limitation. You can always, as long as the patent is in force, can go for the injunction claim.
EU Patent Law Changes
Jan Ozer: That's right. And you're not going for damages. The historical damage amount wouldn't matter. Speaking about EU law, I know there's been a lot of proposed changes in the EU patent law over the last 12 months. What's happening and what's the status of all that?
Gottfried Schüll: I'm not sure if I would call it changes. There has been a discussion about a new regulation about SEP patents licensing, but that has been withdrawn recently, very recently. There has been, of course, introduction of the Unified Patent Court, which is one and a half years ago, which has been established and it's picking up pace and picking up cases. And there has been also one discussion that has been introduced into German law an additional requirement regarding the injunction claim concerning proportionality.
But all this has not changed the proceedings before the German national courts. And we are talking here about proceedings before the German national courts. I believe there's not really changed, at least in our environment, no changes which affect the situation.
Microsoft's Likely Defenses
Jan Ozer: Looking at the case itself, I know you've done a lot of cases like this. What are the defenses that Microsoft is likely to propose against the plaintiffs in this case?
Gottfried Schüll: These are typically, as in every patent litigation case, we have the defense that the patent is not implemented, not used. Defense number one.
Defense number two is that the patent is invalid. These are irrespective of the type of patent. And then we have in the field of standard essential patents, and we are talking here about standard essential patents, SEPs, we have the defense that the licensing program under which the SEPs are offered for license is not FRAND. So it's not fair or reasonable and not non-discriminatory. That's the next defense.
And the further defense is that the offer of a pool license is not in line with FRAND, but a bilateral license offer has to be made by the plaintiffs, thereby evading the pool license. So these are the four defenses basically we see.
Bilateral License Defense
Jan Ozer: The last defense seems counter to the whole benefit of the patent pool. You've got the pool now with over 550 licensees and they've got 23 patent owners. That's over 10,000 individual licenses if they force a bilateral agreement. Is the court typically going to listen to that?
(Author’s note: The actual numbers are 550 and 50, or 25,000 licenses).
Gottfried Schüll: They always listen. But you're absolutely right. There's a factual evidence or factual binding to the situation which has been established over the time and resulted in that many license agreements.
And the legal way to interpret it is that in a situation in which a pool is as established as HEVC pool we are discussing, there is no other way than taking the pool license. Because bilateral license would be discriminatory because other licensees have a full license and so the licensors cannot even grant bilateral licenses because then they would render the whole program unFRAND.
And there's only one way out of that under bilateral licenses which is that the defendant is seeking bilateral licenses from all pool members, which does not make sense economically. As I said, the court will listen to that. The likelihood that that will play an important role is, I would say, remote.
FRAND Defense Likelihood
Jan Ozer: And the FRAND defense, I mean, with 550 licensees, I that seems pretty remote as well.
Gottfried Schüll: Yeah, yeah. So, the FRAND defense also we have here a licensing managing entity which has established an image over the last 25 years for treating fair and transparent. And the FRAND defense is, of course, we have to cope with that always. But as you said.
Timeline of the Case
Jan Ozer: When did you bring the suit and what happens now and how do you see it unfolding over the next few months or years?
Gottfried Schüll: So, we are bringing a suit as soon as the license owners decide to bring a suit. So that's what we do. And as soon as we have filed the cases, which is presently the status, we have brought the cases over the last month. They got served and now there's a deadline for Microsoft to file their Statement of Defense. And then things will progress.
Typically, expect, nearly in all cases, a defense by filing a parallel invalidity action. You know, we have a bifurcated system, perhaps you know that already in Germany. the validity is dealt with in a separate court. So, it's not before the infringement court. So that is what happens in the next month. We expect the bringing of invalidity actions. and we expect a decision by the infringement court within the next about 12 months on the injunction claim.
Patent Validity in German Courts
Jan Ozer: Do you know if Via LA or MPEG-LA has already defended that type of claim? I mean, have the patents been found valid by German courts in the past or any courts that you're aware of?
Gottfried Schüll: What we did, we had a case against another unwilling licensee ending about one and a half year ago, where we asserted parts of the patents we are now asserting. And they have been attacked by invalidity cases, as usual. But the case has been settled by taking a license by the defendant shortly before the main oral hearing.
So it might be reasonable to conclude that he was not that optimistic about the chances of success on validity. Yeah, that's the situation here. We are presently discussing about the second HEVC case which has been brought.
Validity Decision and Infringement Court
Jan Ozer: Then what happens?
Gottfried Schüll: The validity decision is typically after the infringement decision. So, the infringement decision will be ruled without having the validity decision of the Federal Patent Court in Munich. That's at least in, I don't know, 99% of all cases.
But the infringement court is also considering the arguments in the validity case and is making up its own mind. if the infringement court, which is the judges on the infringement benches are highly qualified, also technically qualified, and if they have considerable doubts about validity, they will stay in the infringement case irrespective of an outcome of the invalidity case.
Timeline for Final Resolution
Jan Ozer: Looking at the timeline, when would you expect a final resolution?
Gottfried Schüll: That's difficult to say. As I explained or mentioned, we had many campaigns, more than 35 campaigns over the last 25 years and everything is possible. So, we have seen campaigns settled immediately after filing the complaints. We have campaigns settled after the defendant has considered everything properly, I would guess so. Then we have cases settled typically just in before the main oral hearing in the infringement case and then later on as well.
Maximum Timeline
Jan Ozer: What's the maximum? Is that a two-year process, a one-year process, a five-year process?
Gottfried Schüll: So, yeah, we know we have about one year until we get the injunction claim. And as soon as the injunction claim has been issued, the typical measure is to enforce the injunction claim, meaning stopping the defendant to sell its products. And as I said, there a lot of punitive measures if it does not comply.
US Court Experience
Jan Ozer: Okay. And do you have any experience in US courts? I how long would it take for a similar case in the US to reach a conclusion?
Gottfried Schüll: No, we have no experience in US courts. No, cannot tell you. Only remotely, I'm not qualified to that. And I would say typically in the US it is taking longer. And you have a jury trial, is, according to my understanding, much different from the German benches, which are staffed by judges, which are basically doing nothing else than patent litigation cases. It's much easier to explain something to them than to a jury, I guess at least. So I've never explained anything to a jury.
Typical Response to Injunction
Jan Ozer: What's the typical response? Do any companies ever accept the injunction and agree not to ship in Germany, or do they always take a license?
Gottfried Schüll: No, we have not seen anybody who's really seizing products in Germany. Everybody has taken a license, eventually.
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